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S&P Affirms Nissan Motor Ratings; Off CreditWatch

12 June 1998

S&P Affirms Nissan Motor Ratings; Off CreditWatch

    TOKYO, June 12 -- Standard & Poor's today affirmed its
triple-'B'-minus long-term ratings and 'A-3' short-term ratings of Nissan
Motor Co. Ltd. and related entities (see list below).  At the same time, the
ratings were removed from CreditWatch, where they were placed May 21, 1998
following the company's announcement of its new restructuring plan.  The
outlook on the long-term rating is negative.
    The restructuring plan addresses Nissan's fundamental problems of
weakened product and sales competitiveness, high cost structure, and a heavy
debt burden.  The plan focuses on a major reduction of the company's model and
platform count, the shift towards a more flexible manufacturing system, the
consolidation of domestic sales channels, and a sizable reduction of debt
through sales of various assets in the short to midterm.  If successful, the
plan could put Nissan on a sounder footing in the years ahead. Standard &
Poor's expects the debt reduction to be substantial: total debt to capital
(adjusted for finance receivables), currently over 70%, is expected to fall
below 60% within the next few years.  Only marginal improvement in
profitability is likely in the near term, in light of the difficult business
conditions the company faces in Japan and the U.S.
    The restructuring plan calls for drastic changes in business and
financial strategies, and Nissan will have considerable difficulty in
achieving its goals.  While significant model and platform reduction will lead
to lower costs and higher efficiency, the company faces the challenge of
maintaining vehicle sales volume in Japan with fewer models.  Preserving
domestic market share largely depends on the successful introduction of new,
attractive products over the next few years.  Long-term success is also
subject to the company's ability to improve efficiency in its domestic sales
network. Current economic weakness in Japan, in addition to intensifying
competition worldwide, raises concerns over whether the company can reach
planned sales and financial targets in Japan and in major overseas markets.

    OUTLOOK: NEGATIVE
    Standard & Poor's will continue to monitor Nissan's progress under the
restructuring plan.  The ratings could be lowered if Nissan fails to improve
its competitive position, lower its debt burden, and strengthen its financial
profile over the near term, Standard & Poor's said. --CreditWire

    RATINGS AFFIRMED, REMOVED FROM CREDITWATCH
                                          TO               FROM
    Nissan Motor Co. Ltd.
      Corp credit rtg               BBB-/Negative/A-3   BBB-/Watch Neg/A-3
      Sr unsecd debt                BBB-                BBB-/Watch Neg
    Nissan Motor Acceptance Corp.
      Corp credit rtg               BBB-/Negative/--    BBB-/Watch Neg/--
    Nissan International Finance (Netherlands) B.V.
      Corp credit rtg               BBB-/Negative/A-3   BBB-/Watch Neg/A-3
      Euro CP prog
       (Sup: Nissan Motor Co. Ltd.)      A-3            A-3/Watch Neg
    Nissan Motor Corp. of  USA
      Corp credit rtg               BBB-/Negative/A-3   BBB-/Watch Neg/A-3
    Nissan Capital of America Inc.
      Corp credit rtg               BBB-/Negative/A-3   BBB-/Watch Neg/A-3
    CP (Sup: Nissan Motor Co. Ltd.;
      Gtd: Nissan Motor Corp. of USA)        A-3         A-3/Watch Neg